Corporate Presentation - The Phoenix Mills Ltd. · Next to L&T Raintree Boulevard residential...

CorporatePresentation

August 2019

Phoenix MarketCity Chennai

Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable

laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors

that could cause actual results to differ materially from those suggested by the forward-looking statements.

Important developments that could affect the Company’s operations include changes in the industry structure,

significant changes in political and economic environment in India and overseas, tax laws, import duties, litigation

and labour relations.

The Phoenix Mills Ltd. (PML) will not be in any way responsible for any action taken based on such statements and

undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or

circumstances.

Disclaimer

2

Overview and Strategy Financial ResultsBusiness Performance Annexure

High Street Phoenix & Palladium

PML’s evolution into a retail powerhouse

4

1999-2005 2006-2012 2013-2017 CURRENT

Evolution of High Street Phoenix:

• Textile Mill to Entertainment Hub to Shopping Destination

• Prototype of concept for creating urban consumption hubs

• Pioneered the concept of integrated retail led mixed use development by acquiring large land parcels

• Phoenix Marketcity concept was operationalized in first leg in Mumbai, Pune, Bengaluru, Chennai

• Dominant position across all major cities

• Diversified in residential, commercial and hospitality segments to complement the existing retail portfolio

• Consolidated equity stakes across assets

• Retail Portfolio set to grow from 6 million sq ft to 12 mn sq ft via strategic acquisitions in Bengaluru, Pune, Ahmedabad, Lucknow and Indore

• Strategic JV with CPPIB established in 2017 fully deployed

• Sustained rental income growth in line with strong consumption trend

Marquee Institutional Investors:

Market Capitalisation of the group has grown from USD 100 mn to USD 1.3 bn over last 10 years

FIIs DIIs

Our Annuity Income-Generating Portfolio

MALL PORTFOLIO(5.93 MSF)

HSP & Palladium Mumbai 0.74

Phoenix MarketCity Chennai 1.00

Palladium Chennai 0.22

Phoenix MarketCity Pune 1.19

Phoenix MarketCity Bangalore 1.00

Phoenix MarketCity Mumbai 1.14

Phoenix United Lucknow 0.33

Phoenix United Bareilly 0.31

HOTEL PORTFOLIO(588 KEYS)

The St. Regis Mumbai 395

Courtyard by Marriot Agra 193

OFFICE PORTFOLIO (0.96 MSF)

Fountainhead – Tower 2 & 3

Pune 0.55


OFFICE PORTFOLIO (1.80 MSF)

Phoenix Paragon Plaza Mumbai 0.42

The Centrium Mumbai 0.28

Art Guild House Mumbai 0.80

Phoenix House Mumbai 0.14

Fountainhead – Tower 1 Pune 0.16

OPERATIONAL PORTFOLIO PORTFOLIO UNDER DEVELOPMENT

MALL PORTFOLIO (4.90 MSF)

Phoenix MarketCityWakad

Pune 1.1

Phoenix MarketCityHebbal

Bengaluru 1.2

Phoenix MarketCity Indore 1.0

Phoenix MarketCity Lucknow 0.9

Palladium Ahmedabad 0.7

5Diversified annuity revenue streams ensuring robust long term cashflow visibility

Our Portfolio under Development & Planning

PROJECT NAME Retail OfficeBalance

Development Potential

Total

Portfolio Under Planning

High Street Phoenix (Project Rise) 0.50 1.10+ - 1.60

Phoenix Marketcity Bangalore, Whitefield 0.35 1.00 0.40 1.75

Phoenix Marketcity Pune, Wakad - 0.50 0.30 0.80

Phoenix Marketcity Bangalore, Hebbal - 0.60 - 0.60

Total 0.85 3.20 0.70 4.75

6

PROJECT NAME Retail OfficeBalance

Development Potential

Total

Retail Portfolio Under-development 4.90 -See table on

previous page4.90

Office Portfolio Under-development

Fountainhead Towers 2-3, Pune - 0.55 - 0.55

Commercial offices on top of Palladium Chennai

- 0.42 - 0.42

Total 4.90 0.96 - 5.86

Portfolio Summary

Particulars Retail (msf) Office (msf) Hotel Total

Current Operational Assets 5.90 1.32 588 keys 7.22

Under development Portfolio 4.90 0.96 - 5.86

Portfolio under Planning 0.85 3.00 - 3.85

Total 11.65 5.28 588 keys 16.93

7

Retail Office

2.0x 4.0xAsset-wise portfolio

growth post completion of all under-construction & planned developments

Our Residential Development Portfolio

Kessaku One Bangalore West RESIDENTIAL PORTFOLIO

8

ProjectTotal Area

(msf)

Area launched

(msf)

Balance area (msf)

Launched in July 2019

One Bangalore West - Towers 7

0.24 0.24 -

Under Planning

One Bangalore West - Towers 8-9

0.48 - 0.48

ProjectTotal area

(msf)

COMPLETED

One Bangalore West - Towers 1-5 1.23

One Bangalore West - Tower 6 0.26

Kessaku, Bengaluru 0.99

Crest A,B,C 0.53

Total 3.01

Grand Total 3.72

Presence Across Key Gateway Cities in India

9

• Experienced management team with track record of successful execution• Financial flexibility to execute marquee deals, securing future growth

The PML Advantage

Annuity-led Business Model

• 90% of revenues from annuity-led businesses: Retail, Commercial and Hotel• 10% of revenues from Residential development

Active Mall Management

• Attract right brand mix and locate them in right zones• Partner with retailers to optimal consumption, rentals and growth• Constantly upgrading the mall by changing the lights, flooring, décor, creating special zones.

Synergies from Mixed-use

Development

• Retail-led mixed use developments, in tune with modern consumer lifestyles (work-life-play)• Synergies of a sticky consumer base within the catchment area of our malls

‘Go-to’ Destination

Malls

• Large format retail-led developments with focus on creating ‘go-to’ destinations for entertainment, shopping and dining

• Complete experience enables more time spent in the mall, driving higher consumption

Execution Capabilities

10

PML – Multi faceted growth trajectory

11

• Strong Performance of operational rental assets

• FY14-19 consumption CAGR of 11%

• FY14-19 rental income CAGR at 12%

• PML Malls are future ready

• Higher EBITDA and stronger cash flows

• Prudent capital allocation

• Improving credit ratings and lower interest rates

• Alliance with CPPIB – key enabler to double retail portfolio

• CPPIB invested Rs. 16,620 mn for a 49% stake, balance 51% with PML

• Committed entire funds within 15 months of alliance formation

• Added two retail developments outside of the CPPIB alliance

• Growing portfolio of Grade A commercial spaces complementary to existing operational retail centres in Mumbai, Pune, Bangalore and Chennai

CPPIB Alliance & New Asset Additions

High Street Phoenix & Palladium, Mumbai

Rs. 16,620 mn

Equity infused by CPPIB between April 2017 and 2018

Rs. 22,000 mn

Enterprise Value for ISMDPL (April 2017)

~85%

Equity committed by ISMDPL within 12 months

17,000 mn

Equity value of ISMDPL(April 2017)

Strategic Alliance with CPPIB – Key Highlights

1,228 mn

FY18 EBITDA of ISMDPL

49%

CPPIB’s Equity Stake in ISMDPL

• Strategic alliance with CPPIB to acquire, develop,operate retail-led developments formed in April2017

• CPPIB invested Rs. 1,662 cr in Island Star MallDevelopers Pvt. Ltd. (ISMDPL), PML’s subsidiary, for a49% equity stake with balance 51% stake with PML.

• PML will manage all development and operationalassets in the platform.

• Deployment of Funds:1. August 2017: Purchased 15-acre land parcel in

Pune with development potential of c.1.8msft for Rs. 1.94 billion

2. April 2018: Purchased 13-acre land parcel inBangalore with base development potentialof c.1.8 msft for Rs. 6.93 billion

• With the above two acquisitions, PML hascommitted majority of equity infused by CPPIB

13

PML51%

CPPIB49%

Strategic Alliance with CPPIB

Island Star Mall

Developers Pvt. Ltd. (ISMDPL)Phoenix MarketCity,

Whitefield, Bangalore

Equity infusionRs. 16,620 mn

Malls Under Development Wakad, Pune Hebbal, Bengaluru Indore Land Size (acres) 15 13 19Land Cost (Rs. Mn) 3,000 6,990 2,600Development Potential (msf)

1.8 (Incl. TDR) 1.8 (Excl. TDR) 1.9

Retail (msf) 1 1 1.1

• Established strategic platform in April 2017 for retail-led, mixed use developments in Indiao PML contributed its existing

Phoenix MarketCity Mall, Whitefield, Bangalore valued at Rs. 17 bn

o CPPIB contributed Rs. 16.6 bn

• PML manage all development and operational assets in the platform

• With Wakad (Pune), Hebbal(Bengaluru) and Indore acquisition PML committed majority of equity infused by CPPIB

14

Under-construction asset update

4.9 msf of strong cash-generating retail space to become operational between FY20 to FY23

ProjectPartnership /

ownedLand Size Development Potential Comments

PMC Wakad, Pune

ISML – alliance with CPPIB

(PML stake: 51%)

15 Acres1.6 msf

(1.1 msf retail)

All approvals received. Construction commenced in Feb 2019; Excavation is 95% complete at end of June 2019, foundation work is on

PMC Hebbal, Bengaluru

13 Acres1.8msf

(1.2 msf retail)

All approvals received. Construction commenced in Feb 2019. Excavation is 70% complete as on end of June 2019, foundation work is on

PMC Indore 19 Acres 1.0 msf retail All approvals received, construction commenced in June 2019

PMC Lucknow 100% owned 13.5 Acres 0.9 msf retailConstruction is complete. Shops being handed over for fit-outs. Expect operations to commence during H2 FY20

Palladium, Ahmedabad

50:50 alliance with BSafal group

5.2 Acres 0.7 msf retailConstruction in Progress. Excavation is complete and foundation work is on

We have closed 5 acquisitions – land parcels in Pune, Bangalore and Ahmedabad, under-construction retail assets in Lucknow

and Indore – between Aug 2017 & July 2018

These acquisitions take our under-development retail leasable portfolio to c.4.9 million sft

We have further mixed-use development potential on most of these assets

15

Current mall in Viman Nagar serves the CBD of Kharadi andsurrounding residential areas of Kalyani Nagar, Boat Club,Koregaon Park and neighboring towns such as Ahmednagar

Wakad is almost 23 km away from PMC Pune with strategic andeasy access to:

Commercial areas such as Hinjewadi, Baner and Aundh

Residential areas such as Wakad, Baner, Aundh, Balewadiextending up to Kothrud in South West of Pune

Strong Commercial catchment of 25 mn sft in Hinjewadi (19 msfand expanding) and Aundh / Baner (6 msf and expanding)

Very dense residential population of middle to high income group

Over the coming years, both our malls combined will be able tocater to the entire Pune region and surrounding towns.

TDR purchase of 3.7 lakh sq. ft. TDR locks in 1msf potential for Retaildevelopment

PML-CPPIB alliance has the mandate to acquire, develop & operate prime, retail-led developments across India

Land acquisition at Wakad, Pune (Aug 2017)

Project Update

Location DynamicsDeal Overview Wakad, PuneLand Size (acres) 15Location Behind Hotel SayajiAcquisition Cost – Land + TDR (Rs. Mn)

2,360

Development Potential (msf) 1.8 (incl. purchase of TDR)- Phase 1: Retail (msf) 1.0- To be developed later 0.8

Concept

A contemporary mix of family entertainment zones, multiplexes, large-format departmental stores, inline stores and fine dining options

16

Site Location: https://goo.gl/maps/ZdXVLEfP9R82

https://goo.gl/maps/ZdXVLEfP9R82

Concept Architect – Callison

Phoenix MarketCity Wakad, Pune - Concept

17

Phoenix MarketCity Wakad, Pune - Site Pictures

18

Excavation is 95% complete, foundation work is on in parallel

Current mall in Whitefield serves the eastern parts of Bengaluru city

Hebbal is almost 19 km away from PMC Bangalore with strategic and easy access to key commercial & residential areas

Strong operational Commercial catchment of ~11 mn sft in vicinity

Dense residential population with capital values in the range of Rs. 10,000+

Over the coming years, both our malls combined will be able to cater to the key micro markets in Bengaluru.

PML-CPPIB alliance has the mandate to acquire, develop & operate prime, retail-led developments across India

Land acquisition at Hebbal, Bangalore (Apr 2018)

Location DynamicsDeal Overview Hebbal, BangaloreLand Size (acres) 13

LocationNext to L&T Raintree Boulevard

residential

Acquisition Cost (Rs. Mn) 6,990Development Potential (msf) 1.8 (Excl. TDR)

- Phase 1: Retail (msf) 1.0- To be developed later 0.8

Concept

A contemporary mix of family entertainment zones, multiplexes, large-format departmental stores, inline stores and fine dining options

19

Site Location:https://goo.gl/maps/GFszmFym5mw

https://goo.gl/maps/GFszmFym5mw

Phoenix MarketCity Hebbal, Bengaluru - Site Pictures

20

Excavation is 70% complete, foundation work is on in parallel

Commercial

Area acquired by ISML

Mall & Multiplex Mixed Use

Commercial

Residential

Commercial

Disclaimer:The shaded areas are illustrative and not to scale The Residential & Commercial areas are part of L&T’s development, and may be subject to change

Land acquisition at Hebbal, Bangalore (Apr 2018)

Mixed Use Development • Residential: 30 Acres

(development potential of 3.8 million sq. ft.)

• Commercial (Tech, SEZ & IT Park): 23 acres (development potential of 2.9 million sq. ft.)

21

Phoenix Marketcity Indore is a 1.1 msft retail development at Mumbai-Agra National Highway, MR 10, Indore

Acquisition of Under-Construction Mall at Indore

22

i. Acquired 19 acres of land parcel for Rs. 2,335 mn. (land and

under-construction retail development) in an e-auction

ii. The retail development has GLA of approx. 1.1 msf

iii. Development will be as part of our retail alliance with

CPPIB

Indore is an underserved market with appetite for a 1 msft. high quality retail, F&B and entertainment destination

New growth in Retail, Entertainment & Housing is taking place along the Mumbai Agra National Highway (Grand Bhagwati Hotel, Premium Residential projects such as DLF Garden City, Grand Exotica etc.)

Pithampur (Indore SEZ built over 1,038 acres) is only 28 km away from the site and consists of many national and international companies

Retail hub of Madhya Pradesh with consumers from feeder towns such as Ujjain, Dewas, Sehore, Ratlam etc.

Deal Overview Location Dynamics

Project Update

i. 80% of the RCC work is complete

ii. Phoenix Marketcity Indore is expected to begin operations

in late FY21

Acquisition of Under-Construction Mall at Indore

23

Site Location:https://goo.gl/maps/qCRcMaBCoQH2

https://goo.gl/maps/qCRcMaBCoQH2

Phoenix MarketCity Indore - Site Pictures

24

Construction in Progress

Phoenix Marketcity Lucknow is an approx. 1 msft retail development, with a proposed store count of 300, spread over four levels

Acquisition of Under-Construction Mall at Lucknow

25

i. Acquired 13.5 acres of land, with an under construction

(structure is 90% ready) retail development via an auction

for Rs. 4,530 mn.

ii. The retail development has GLA of approx. 0.9 msf

iii. This development is 100% owned by PML

Gomti Nagar has emerged as an exclusive growth corridor of the city, with reputed companies, schools and world class infrastructure in its vicinity

IT City – a 100 acre integrated development is merely 5 minutes away from the site

Organizations in Gomti Nagar close to the site include TCS, SONY, NTPC, BHEL, HCL Technologies, UNICEF etc.

Site is also close to key landmarks in the city such as Taj, Lucknow, L’ecole Du Monde, Amity University, the High Court of Lucknow among other prestigious educational and government institutions


Acquisition of Under-Construction Mall at Lucknow

Project Update

i. 90% of the RCC work is complete

ii. Phoenix Marketcity Lucknow is expected to begin

operations during FY21

26

Site Location:https://goo.gl/maps/oLPEMYDsacE2

https://goo.gl/maps/oLPEMYDsacE2

Phoenix MarketCity Lucknow – Master Layout

27

LDA Land56.30 acres

Phoenix MarketCity Lucknow - Site Pictures

28

Construction of the mall is complete; façade, interiors & fit-outs in progress

Phoenix MarketCity Lucknow - Site Pictures

29

Mall targeted to operationalize in H2FY20

Phoenix MarketCity Lucknow - Indicative Renders

Mall Arcade View Inside View

30

31

Premium retail development with GLA of approx. 0.6 msf located at Thaltej on the Sarkhej-Gandhi (SG) Highway

Land acquisition at Thaltej, Ahmedabad – Overview

i. PML has entered into a 50:50 alliance with

Ahmedabad based BSafal group

ii. The alliance has acquired 5.16 acres of land, located

at Sarkhej-Gandhi (SG) Highway, at Rs. 2.3 bn

iii. The alliance will develop a premium retail

development of 0.6 msft in first phase

iv. PML will design, lease and manage the asset, and

earn a fee for these activities

Sarkhej Gandhinagar (SG) Highway road is the key growth corridor of the city

This area includes prime affluent residential and commercial catchments such as Vastrapur, Prahlad Nagar, Bodakdev, Jodhpur, Navrangpura, Ambawadi, Satellite Road

During 2017, 86% of the office market supply in Ahmedabad was added in this micro market along SG Highway

Land acquisition at Thaltej, Ahmedabad


32

Site Location:https://goo.gl/maps/SRmhgknb2Xy

https://goo.gl/maps/SRmhgknb2Xy

Palladium, Ahmedabad - Site Pictures

33

Excavation in complete, foundation work is currently on

Phoenix MarketCity Mumbai


Q1 FY20 Standalone P&L

(Rs. mn) Q1 FY20 Q1 FY19YoY %

Change FY19

Income from operations 1,133 1,092 4% 4,403

EBITDA 700 688 2% 2,686

EBITDA Margin (%) 62% 63% 61%

Profit Before Tax and exceptional item

458 447 3% 2,093

Profit after tax & before comprehensive income

356 347 3% 1,731

Diluted EPS (Rs.) 2.32 2.26 3% 11.26

35

Q1 FY20 PATRs. 356 mn

Q1 FY20 EBITDARs. 700 mn

3%

2%

Q1 FY20 Consolidated P&L

(Rs. mn) Q1 FY20 Q1 FY19YoY %

Change FY19

Income from operations 6,150 4,132 49% 19,816

Retail 3,046 2,905 5% 11,551

Residential 2,071 281 637% 3,795

Commercial 250 149 68% 881

Hospitality & Others 783 797 -2% 3,589

EBITDA 2,927 1,953 50% 9,931

EBITDA Margin (%) 48% 47% 50%

Profit after tax 1,469 543 170% 4,617

PAT after minority interest & before other comprehensive income

1,304 597 118% 4,210

PAT after minority interest & after other comprehensive income

1,077 889 21% 4,379

Diluted EPS (Rs.) 8.48 3.89 118% 27.40

36

Q1 FY20 PATRs. 1,304 mn

Q1 FY20 EBITDARs. 2,927 mn

118%

50%

Note: Revenue from Hospitality & Others is down on a y-o-y basis on account of sale of Restaurant Business operating under Bellona Finvest in Q3FY19

Business-wise Consolidated P&L breakup

37

Q1 FY20 Residential

PAT

Rs.496 mn

Q1 FY20 Core

Portfolio PAT

Rs. 808 mnQ1 FY20

Consolidated PAT

Rs. 1,304 mn

High Street Phoenix & Palladium, Mumbai

ParticularsQ1

FY20Q1

FY19% change FY19

Core Portfolio PAT (Rs. mn)

808 576 40% 3,222

Residential PAT (Rs. mn)

496 21 988

Consol PAT (Rs. mn)

1,304 597 118% 4,210

Note: Core Portfolio = Retail Malls + Commercial Offices + HotelsResidential Portfolio = One Bangalore West + KessakuConsol PAT = PAT after minority interest but before other comprehensiveincome

Debt Profile as on 30th June 2019

Credit RatingsAs on June 30, 2019

Ratings Agency

PML Standalone A+

PMC Bangalore A

The St. Regis, Mumbai A-

PMC Pune A-

PMC Mumbai A-

Status Asset Class Amount (Rs. mn)

Operational

Retail 31,872

Hospitality 5,409

Commercial 2,761

Residential 1,119

Sub-total (A) 41,162

Under-development

Retail 3,005

Commercial 737

Sub-total (B) 3,741

Grand Total (A+B) 44,903

38

Average cost of borrowing up marginally to 9.36%

89% of Debt is long-term. Debt on the operational portfolio is primarily lease-rental discounting for retail and commercial or backed by steady Hotel revenues

Strong credit ratings maintained for the SPV’s, in the A+ to A- range.

Strong interest coverage across the group companies as on 31st March 2019:

HSP : 3.8x

PMC Bangalore: 3.4x

The St. Regis: 2.8x

PMC Chennai: 2.5x

PMC Pune: 2.5x

Offbeat (PMC Mumbai + AGH): 2.2x

Debt reduction across operating Assets

39

40,121

41,314

42,480

41,256 41,49041,162

FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20

• Reduction in debt has been done across most operating assets in line with steady annuity income

• Construction Finance on under development assets (Wakad, Hebbal, Indore, Ahmedabad) to be taken only upon fully deploying equity component

• Upon operationalization of the under-development retail assets, construction loans will be converted into lease-rental discounting (LRD) loans backed by the asset’s annual income generation ability

• PML infused Rs. 500 mn of further equity in PMC Lucknow project during Q1FY20

0

2,582 2,6703,494

3,980 3,741

FY18 Q1FY19 Q2FY19 Q3FY19 Q4 FY19 Q1 FY20

Total Debt

FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20

40,121 43,896 45,150 44,750 45,469 44,903

Debt on Operational portfolio (Rs. mn)

Debt on Under-development portfolio (Rs. mn)

Effective Cost of Debt & Maturity Profile

12.3%

11.8%

11.0%

10.2%

8.94% 9.14%9.38% 9.36%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

Mar

-14

Mar

-15

Mar

-16

Mar

-17

Mar

-18

Sep

-18

Mar

-19

Jun

-19

Effective cost of debt (%) Debt Maturity Profile^(Rs. mn)

3,546 4,579 4,757

40,274

FY20 FY21 FY22 FY23 and later

40^ As on 31st March 2019

Debt maturity profile is based on total sanctioned limits Lower Interest rate transmission to help further reduce cost of borrowing Modest debt maturities of Rs. 3-5bn per year for the next 3 years

41

Demonstrated Strong & Increasing Free Cash Flow Generation

2,631

6,784

7,620

7,869

8,469

7,774^

9,913^

1,323

2,255

2,973

2,543

3,633

4,404

5,250

0 2,000 4,000 6,000 8,000 10,000 12,000

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Free Cash Flow after Interest and Tax (Rs.mn) EBITDA (Rs.mn)

• Consolidated EBITDA has grown at a CAGR of 24.7% between FY13-19

• Free Cash Flow (FCF) has grown at a CAGR of 23.3% between FY13-18 utilization was largely towards consolidating our stakes across various SPVs

• FY19 FCF of Rs. 4,650 mn is up 6% yoy utilized towards land acquisitions in Lucknow and Ahmedabad

^ Effect of re-classification of Classic Mall Developers Pvt. Ltd. As an associate effective from 31 March 2017

43

40.3

49.054.0

57.863.2

16.9 17.8

FY14 FY15 FY16 FY17 FY18 FY19 Q1FY19 Q1FY20

Consumption (Rs. bn)

5% 5.76.5

7.17.7

8.6

9.9

2.4 2.6

FY14 FY15 FY16 FY17 FY18 FY19 Q1FY19 Q1FY20

Rental Income (Rs. bn)

** Average for quarter ended June 2019 * As of end-June 2019

FY14-19 CAGR – 11%

FY14-19 CAGR – 12%

Operational Update – Retail Portfolio

HSP & Palladium

Phoenix MarketCity Phoenix United Palladium

Mumbai Bangalore Chennai^ Mumbai Pune Bareilly Lucknow Chennai

Retail Leasable/Licensable Area (msf ) 0.74 1.00 1.00 1.14 1.19 0.31 0.33 0.22

Total No. of Stores 270 296 263 311 352 139 128 86

Average Rental (Rs. psf)** 406 124 139 101 125 67 77 130

Trading Occupancy %** 93% 97% 99% 93% 98% 88% 89% 85%

Leased Occupancy %* 99% 99% 100% 97% 99% 91% 94% 90%

7%

68.9

4,2283,364 3,331

2,589 2,677

283 814 529

HSP & Palladium PMC Bengaluru PMC Pune PMC Mumbai PMC Chennai PalladiumChennai

Phoenix UnitedLucknow

Phoenix UnitedBareilly

Consumption (Rs. mn)

44

Q1 FY20 – Retail Key Highlights

Total Consumption – Rs. 17,815 mn, up 5% yoy

14%-1% 9% 4% 16%36%9%

3,025

1,749 1,441 1,222 1,435 770 1,186822




Trading Density (Rs. per sq. ft pm)

7%3% 9% 17% 2%6%-8%8%

780

385 440323

437

59 72 60




EBITDA (Rs. mn) Total EBITDA – Rs. 2,556 mn, up 8% yoy

881

359 432323 394

73 77 57




Rental Income (Rs. mn)

Q1 FY20 – Retail Key Highlights

Total Rental Income – Rs. 2,596 mn, up 7% yoy

10% 4% 6% 12%

3% 16% 14% 4%

45

6%5% 13%

11%

20%

4% 8%6%

713 776 803 839 839 886 868 881

Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20

PML owned Assets incl. High Street Phoenix & Palladium

46

3,6174,574 4,057 4,251 4,025

4,7554,013 4,228


Co

nsu

mp

tio

n (

Rs.

mn

)R

enta

l In

com

e (

Rs.

mn

)

Down 1% yoy

Up 5% yoy

• Rental Income was up 5% yoy to Rs. 881 mn

• Consumption of Rs. 4,228 mn in Q1FY20, down 1% yoy

Stable Performance at High Street Phoenix

Q1 FY20 Q1 FY19 % yoy

growthFY19

Rental Income (Rs. mn) ^ 881 839 5% 3,432

Recoveries (CAM and other) (Rs. mn)

252 253 973

Total Income (Rs. mn) 1,133 1,092 4% 4,406

Asset EBITDA (Rs. mn) 780 758 3% 3,171

EBIDTA Margin (as % of Rental Income)

89% 90% 92%

Standalone EBITDA (Rs. mn) 700 688 2% 2,686

Mall Rental Rate (Rs./sft pm) ^

406 387 5% 388

Mall Consumption (Rs. mn) 4,228 4,251 -1% 17,044

Mall Trading Density (Rs./sft pm) 3,025 2,935 3% 2,943

Mall Trading Occupancy (%) 93% 94% 95%

^ Rental Income includes Commercial Offices; **Standalone EBITDA is lower than Mall EBITDA on account of business development expenditure, central resource salaries and other business expense

PML owned Assets incl. High Street Phoenix & Palladium

47

2,0392,293

2,6012,837 3,022

3,432

FY14 FY15 FY16 FY17 FY18 FY19

Rental Income (Rs.mn)

13,18514,403 15,438 16,264 16,456 17,044


Consumption (Rs.mn)

2,2632,553 2,741 2,894 3,034 2,943


Average Trading Density (Rs./sft pm)FY14-19 CAGR – 5%

FY14-19 CAGR – 11%

High Street Phoenix & Palladium Mall

48

49

Project Name FY2017 FY2018 FY19 Q1 FY20

Commercial Asset

Phoenix House 175 154 147 48

Centrium 81 69 96 20

Art Guild House 29 119 168 45

Retail Asset High Street Phoenix 2,532 2,659 3,021 769

Total Rental Income reported by PML Standalone

2,837 3,022 3,432 881

PML owned Assets Income Split– Commercial & Retail

PML (Standalone entity) owns the following assets:

• Retail – High Street Phoenix & Palladium: Leasable area of 0.74 msf

• Phoenix House: Leasable area of 0.14 msf

• Centrium: Leasable area of 0.12 msf

• Art Guild House: Leasable area of 0.16 msf

311329 322

339 345361

347359


Phoenix MarketCity Bangalore

50

3,030 3,2992,859 3,100 3,183 3,514

3,048 3,364


Co

nsu

mp

tio

n (

Rs.

mn

)R

enta

l In

com

e (

Rs.

mn

)

Up 9% yoy

Up 6% yoy

• Rental Income at Rs. 359 mn for Q1, up 6% yoy

• Consumption was up 9% to Rs. 3,364 mn while trading density was up 8% to Rs. 1,749 psf pm during this

quarter

Steady improvement in Rental Income and EBITDA

Q1FY20 Q1FY19 % yoy

growthFY19

Rental Income (Rs. mn) 359 339 6% 1,392

Recoveries (CAM and other)(Rs. mn)

184 171 8% 678

Total Income (Rs. mn) 543 510 6% 2,070

EBITDA (Rs. mn) ^ 385 346 11% 1,418


107% 102% 102%

Rental Rate (Rs./sft pm) 124 116 7% 119

Consumption (Rs. mn) 3,364 3,100 9% 12,843

Trading Density (Rs./sft pm) 1,749 1,622 8% 1,680

Trading Occupancy (%) 97% 98% 98%


51^ EBITDA is before fees paid to MarketCity Resources Pvt. Ltd (PML’s 100% subsidiary) and interest income earned on liquid mutual fund investments and fixed deposits

768876

9581,090

1,2751,392



52

6,5737,753

8,85910,200

12,361 12,843


Consumption (Rs.mn)

9751,131

1,2871,444

1,694 1,680


FY14-19 CAGR – 13%

FY14-19 CAGR – 14%


Average Trading Density (Rs./sft pm)

332 357 360 380 387 416 406 432


Phoenix MarketCity Pune

53

2,4952,969 2,616 3,045 2,937

3,4052,820

3,331


Co

nsu

mp

tio

n (

Rs.

mn

)R

enta

l In

com

e (

Rs.

mn

)

Up 9% yoy

Up 13% yoy

• Rental Income was Rs. 432 mn in Q1FY20 , up 13% yoy while Consumption was up 9%

• Strong Consumption & Rental income growth led to sustained growth in EBITDA, up 16% for Q1 FY20 at Rs.

440 mn

Strong rental Income growth contributed to superior EBITDA growth


Q1 FY20 Q1 FY19% yoy

growthFY19



206 232 793


EBITDA (Rs. mn) 440 381 16% 1,566


102% 100% 99%

54





789941

1,0351,202

1,3861,589



55

6,2217,650

8,6599,629

10,82812,207


Consumption (Rs.mn)

812975

1,0771,208 1,224

1,334



FY14-19 CAGR – 15%

FY14-19 CAGR – 14%


271 284 281 295 300 311 310 323



56

1,8012,320

1,970 2,266 2,2832,654 2,356 2,589


Co

nsu

mp

tio

n (

Rs.

mn

)R

enta

l In

com

e (

Rs.

mn

)

Up 14% yoy

Up 10% yoy

• PMC Mumbai continues to be amongst the fastest growing assets

• Consumption growth of 14% resulted in a strong EBITDA Margin of 100% for Q1FY20

• EBITDA for Q1 FY20 was up 14% yoy to Rs. 323 mn

PMC Mumbai continues strong performance, establishing itself as a premium destination mall


Q1FY20 Q1FY19 % yoy

growthFY19



181 183 751


EBITDA (Rs. mn) 323 284 14% 1,188


100% 96% 98%





57The total leasable area in PMC Mumbai has gone up from 1.11 msf to 1.14 msf on account of addition of new area

934 991 954 926

1,1021,216



58

4,4605,480 5,957

6,9578,143

9,559


Consumption (Rs.mn)

586705

797942

1,0441,161



FY14-19 CAGR – 5%

FY14-19 CAGR – 16%


343 351 357 380 376 388 384 394



59

2,706 2,747 2,4782,857 2,867 2,898

2,446 2,667


Co

nsu

mp

tio

n (

Rs.

mn

)R

enta

l In

com

e (

Rs.

mn

)

Down 6% yoy

Up 4% yoy

• PMC Chennai reported a 4% growth in Rental Income, EBITDA was up 4%

• Consumption and Trading density were impacted on account of certain high consumption stores being

under renovations

Category changes in the retail product mix have had a positive impact on rental income


Q1 FY20 Q1 FY19 % yoy

growthFY19



206 201 3% 878


EBITDA (Rs. mn) 437 420 4% 1,642


111% 110% 107%


Consumption (Rs. mn) 2,677 2,857 -6% 11,071

Trading Density (Rs./sft pm) 1,435 1,561 -8% 1,505


60

858

1,1091,196

1,2861,394

1,529



61

6,938

10,48111,289 10,699 10,742 11,071


Consumption (Rs.mn)FY14-19CAGR – 10%

FY14-19 CAGR – 12%


1,2261,480 1,572 1,553 1,489 1,505



Note: PML owns 50.0% of CMDCPL and CMDCPL has been classified as an Associate of the Company effective 31 March 2017. Hence, it's income from operations and expenses (including taxes) have not been consolidated in PML's results

Palladium Chennai

0.22 Million Sq. Ft.Total Leasable Area

13th Oct 2017Operations Begin

• Palladium Chennai became operational on 13th Oct 2017 with launch of H&M

• Includes brands such as Michael Kors, Tumi, Coach, H&M, Shoppers Stop, etc.

• Full scale operations commenced from Feb 17, 2018

Palladium Chennai

Q1FY20 FY19

Rental Income (Rs. mn) 73 248


29 163

Total Income (Rs. mn) 102 411

EBITDA (Rs. mn) 59 158

EBIDTA Margin (as % of Total Income)

81% 64%

Rental Rate (Rs./sft pm) 130 126

Consumption (Rs. mn) 283 1,039

Trading Density (Rs./sft pm) 769 773

Trading Occupancy (%) 85% 77%

63

PML – Preferred destination for All

Retaile

rs Co

nsu

me

rs64

1. Creating a community mixed-use development

2. Our malls are typically 1 msft or higher – complete offering with strong focus on F&B, Entertainment

3. Delivering a WOW experience with strong focus on art, aesthetics and fragrance architecture

4. Mobility & convenience by providing for Uber/Ola lounges, optimum traffic navigation around the site, multiple access points etc.

5. Something for Everyone

Customers

1. Malls located at Prime Catchments in the major metropolitan cities of India

2. Experienced & Decentralized Mall Management teams

3. Superior interior & property management

4. Regular Marketing events

5. Time-tested and technical approach to zoning and tenant brand mix in every mall

Retailers

Delivering WOW

Experience

Creating a Community -

Mixed-Use Development

F&B and Entertainment

• Grand Heights• Wow Elements• Grand Arrival• Luxury Retail• Great Art• Connectivity - Social Media

Friendly

Mobility & Convenience

• Office Anchor

• Hotel

• Large Events Venue

• Performing Arts Auditorium / Multi-purpose Venue

• F&B Village

• High Street F&B

• 20+ % F&B

• 10+ Cinema Screens

• Fitness Club

Phoenix Retail Evolution 2.0

FUTURE

READY

• Easy Pickup/Drop for OLA and Uber

• Multiple Entry Points at different levels

• Technology integration for better parking management

65

Revenue Cycle of a Mall

100

120

140

160

180

200

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Ren

t P

SF (

Reb

ase

d t

o 1

00

)

Annual rent escalation in mid-single digits

Rent escalation of mid to high teens in 3rd year

Majority of retail lease agreements at PML pay higher of minimum guarantee (MG) rents and revenue share (% of consumption)

Generally MG escalates by mid-double digits at the end of 3 years and mid-to-high single digits annually in the interim

Typically a lease is renewed at the end of 5th year and the renegotiated MG / revenue share is significantly higher

Lease renewal at significantly higher rates

66

PMC malls are currently in second leg of this growth

5%

26%38%

FY20 FY21 FY22

5%

24%34%

FY20 FY21 FY22

11%20% 19%

FY20 FY21 FY22

Renewal Schedule (% of total leasable area)

21%16% 12%

FY20 FY21 FY22

2%

20%31%

FY20 FY21 FY22

HSP

& P

alla

diu

mP

MC

Ban

galo

re

PM

C C

he

nn

ai

PM

C M

um

bai

PM

C P

un

e

49% of leasable area for renewal over next 3 years





67

HSP (2019)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 1,000 2,000 3,000

In 2010, trading density and consumption at HighStreet Phoenix was at Rs 1,055 psf pm and Rs 4,371mn, respectively today, has grown 3-4x since 2010

All MarketCity malls are in similar position (in terms oftrading density) as HSP was in 2010; poised to followsimilar growth path as HSP over next few years

Marketcity Malls Poised to follow HSP’s growth path

FY

19 R

en

tals

(R

sm

n)

Trading Density(Rs Psf pm)

HSP (2010)

Bubble size represents consumption

MarketCity malls to follow similar growth trajectory at HSP & Palladium

Long Term Sustainable Growth Delivered Through The Cycle

Trading density(psf)

Rental(INR mn)

Consumption(INR mn)

HSP – 2010 1,055 827 4,371

HSP (FY19) 2,981 3,432 17,044

HSP growth (FY10 – 19) 2.82x 4.14x 3.89x

PMC Mumbai (FY19) 1,174 1,216 9,599

PMC Pune (FY19) 1,334 1,589 12,207

PMC Bangalore (FY19) 1,680 1,392 12,843

PMC Chennai (FY19) 1,505 1,592 11,071

Marketcity Malls are attractively poised to exhibit similar long-term growth as HSP

68

Business Performance -Commercial

Project Name

Total Area (msf)

Area Sold (msf)

Net Leasable Area (msf)

Area Leased (msf)

Phoenix House 0.14 - 0.14 0.13

Centrium 0.28 0.16 0.12#

0.10

Art Guild House 0.80 0.20@

0.60@

0.54

Phoenix Paragon Plaza 0.41 0.12 0.29 0.17

Fountainhead – Tower 1 0.17 0.00 0.17 0.14

Total 1.80 0.48 1.32 1.08

@Total Area sold is 0.38 msf out of which PML owns 0.17 msf – this area is also counted in area available for lease^Rental Income from Phoenix House is part of Standalone results #Area owned by PML

Our Annuity Income Generating Commercial Portfolio

70

OPERATIONAL OFFICE PORTFOLIO (1.80 MSF) OFFICE PORTFOLIO UNDER DEVELOPMENT (0.96 MSF)

OFFICE PORTFOLIO ( 0.96 MSF)

Fountainhead – Tower 2 &3 Pune 0.54


Total 0.96

Total Area (msf)

Area Sold (msf)

Net Leasable

Area (msf)

Area Leased (msf)

Average Rate

(Rs./sq.ft)

Art Guild House

0.80 0.20@

0.60@

0.54 97

@Total Area sold is 0.38 msf out of which PML owns 0.17 msf – this area is also counted in area available for lease

Art Guild House has a trading occupancy of 89% as of June 2019

Operational Update – Art Guild House

71

Q1 FY20 Q1 FY19 FY19 FY18

Total Income (Rs. mn)

148 140 582 396

EBITDA (Rs. mn)

78 87 335 157

% of Total Income 53% 62% 58% 40%

Total Area (msf)

Area Sold (msf)

Net Leasable

Area (msf)

Area Leased (msf)

Average Rate

(Rs./sq.ft)

Phoenix Paragon Plaza

0.41 0.12 0.29 0.16 95

Operational Update – Phoenix Paragon Plaza

72

Q1 FY20 Q1 FY19 FY19 FY18


72 57 358 219

EBITDA (Rs. mn) 44 37 213 91

% of Total Income 61% 65% 59% 42%

Commercial asset update

Fountainhead Pune

Remarks

Tower 1Leasable area: 0.17 msf - 0.16 msf (94%) area has been leased. 0.08 msf is currently operational as of June 2019

Tower 2Leasable area: 0.22 msf. Construction completed upto 10th floor of this 16 floor tower

Tower 3Leasable area: 0.35 msf. Construction commenced in Q1FY20 and completed till 7th floor of this 15 floor tower

73Fountainhead Tower 2 - Side Fountainhead Tower 1 - Side

4%12% 9% 7%

FY20 FY21 FY22 FY23

Renewal Schedule (% of total leasable area)

0% 1%

42%35%

FY20 FY21 FY22 FY23

Art

Gu

ildH

ou

seP

ho

en

ix

Par

ago

n P

laza



74

Business Performance -Hotels

XXO, The St. Regis, Mumbai

#For Q1 FY20 76

The St. Regis, Mumbai

Courtyard by Marriott, Agra

Keys 395 193

Restaurants & Bar 10 4

Occupancy (%)# 82% 64%

Average room rent (Rs. / room night) #

10,913 3,353


82% room occupancy in Q1 FY20 vs 74% in Q1 FY19

Total Income grew by 5% to Rs. 698 mn

ARR for the quarter was at Rs. 10,913


Total Revenue was at Rs. 76 mn for Q1 FY20, up 36% led by

improvement in occupancy

Q1 FY20 room occupancy at 64%, up from 47% in Q1 FY19

ARR was Rs.3,353, up 5%

Operational Update – Hospitality


growthFY19

Revenue from Rooms (Rs. mn)

318 294 8% 1,352

Revenue from F&B and Banqueting (Rs. mn)

316 295 7% 1,424

Other Operating Income (Rs. mn)

64 72 267


698 662 5% 3,042

Operating EBITDA(Rs. mn)

253 242 5% 1,234

EBITDA margins 36% 37% - 41%

Occupancy (%) 82% 74% 8 pps 80%

ARR (Rs.) 10,913 11,295 -3% 11,776


77


growthFY19

Revenue from Rooms (Rs. mn) 37 26 42% 188

Revenue from F&B and Banqueting (Rs. mn)

35 28 25% 163

Other Operating Income(Rs.mn)

4 3 33% 19

Total Income (Rs. mn) 76 56 36% 370

Occupancy (%) 64% 47% 17 pps 67%

ARR (Rs.) 3,353 3,181 5% 3,908


78

Business Performance -Residential

Kessaku, Bengaluru

• Premium and upscale, large-scale residential developments

• Product design, quality and location in or around mixed-usedestinations have established the project as a market leader

• Expect substantial free cash flows from residential projects in thecoming years:

• Cash flows from sold inventory sufficient to cover constructioncost to complete project

• Selling prices for the projects more than doubled in the last 5years (CAGR of 18-20% over the last 5 years) whileconstructions costs have increased by only c5-10%

• Residual inventory (both ready and under-construction) atcurrent prices represents significantly higher profit margins

• Bengaluru (One Bangalore West and Kessaku):• Construction of Towers 1-6 at One Bangalore West is complete• Received OC for five towers of Kessaku in March 2019• Received OC for Tower 6 in OBW in April 2019

Residential Portfolio: High Margin, Cash Flow Business

One Bangalore West and Kessaku

The Crest

Residential portfolio to aid in significant free cash flow generation

80

## Note that of the nine towers in One Bangalore West (OBW), only Towers 1-6 have been launched and completed. Tower 7 was launched in July 2019

81

Project Name (operational)

Saleable area (msf) Cumulative Area Sold

(msf)

Sales Value (Rs. mn) ^

Collections in Q1 FY20 (Rs. mn)

Revenue recognized (Rs. mn)

Total Area

Area launchedBalance

Area in Q1 FY20 Cumulative

One Bangalore West, Bengaluru

2.20 1.49 0.71## 1.30 12,095 416 1,954 12,095

Kessaku, Bengaluru 0.99 0.52 0.47 0.25 3,290 337 117 3,290

Total 3.21 2.01 1.18 1.55 15,385 753 2,071 15,385

Q1 FY20 Revenue recognition of Rs. 2,071 mn from One Bangalore West & Kessaku

One Bangalore West Tower 6 received occupation certificate in April 2019

Collections from One Bangalore West & Kessaku were Rs. 753 mn during the quarter

Key highlights

Operational Update – Residential Portfolio

^ Sales value is excluding taxes and other charges

One Bangalore West, Bangalore

82

Tower 7 Launched at One Bangalore West

83

• Launched Tower 7 in July 2019• Received positive response from customers for this

launch • Construction of Tower 7 is completed upto 5th floor


Iridium Spa at The St. Regis, Mumbai

Sr. No Top Institutional Investors % Shareholding

1 Nordea Bank 5.36%

2 Schroder 3.37%

3 TT Funds 2.60%

4 Fidelity 2.54%

5 DSP Mutual Fund 1.95%

6 Reliance Mutual Fund 1.65%

7 Van Eck 1.47%

8 Vanguard 1.42%

9 UTI Mutual Fund 1.41%

10 Mondrian 1.20%

Total – Top 10 Institutional Investors 22.97%

Shareholding Pattern

62.75%

26.92%

5.88%

3.22% 1.23%

Promoters

FII

DII

Public

Corporate bodies

Shareholding Pattern as on 30th June 2019

85

Asset Type SPV Asset Name PML OwnershipQ4FY19 Debt

(Rs.mn)Q1FY20 Debt

(Rs.mn)

Retail & Mixed-Use

PML Standalone High Street Phoenix, Mumbai 100% 7,970 8,245Classic Mall Development

Phoenix MarketCity, Chennai 50% 6,926 6,794

The Crest C (Residential)

Vamona DevelopersPhoenix MarketCity, Pune

100% 6,372 6,244East Court (Commercial)

Island Star Mall Developers

Phoenix MarketCity, Bangalore 51% 3,823 3,721

Offbeat DevelopersPhoenix MarketCity, Mumbai

100% 6,827 6,767Art Guild House (Commercial) Centrium (Commercial)

Blackwood Developers Phoenix United, Bareilly 100% 980 959

UPAL Developers Phoenix United, Lucknow 100% 768 723Graceworks Realty & Leisure

Phoenix Paragon Plaza (Commercial) 67% 1,160 1,180

Hotel & Residential

Palladium ConstructionsOne Bangalore West & Kessaku (Residential)Courtyard by Marriott, Agra (Hotel)*

80% 1,883 1,747

Pallazzio Hotels & Leisure

The St. Regis, Mumbai 73% 4,781 4,781

Retail Destiny Hospitality Phoenix MarketCity, Lucknow 100% 3,255 3,005

Office Alliance Spaces Fountainhead 75% 725 737

Total Total 45,470 44,903

Q1 FY20 Debt Across Subsidiaries

86

Operational

Under Development

Varun ParwalContact: +91 22 3001 6737Email: [email protected]

Saket Somani / Rohan RegeContact: +91 22 6169 5988Email: [email protected]

Website: http://www.thephoenixmills.com/investordesk.html

87

Advait PhatarfodContact: +91 22 3001 6804Email: [email protected]

Corporate Presentation - The Phoenix Mills Ltd. · Next to L&T Raintree Boulevard residential...

Documents

Transcript of Corporate Presentation - The Phoenix Mills Ltd. · Next to L&T Raintree Boulevard residential...